This morning the Census Bureau reported that construction began on 598,000 new housing units in August and revised July's starts to 541,000:
http://www.census.gov/const/newresconst.pdf
The Bureau's press release said this was a gain of 10.5% and also said that August's figure was 2.2% ahead of July 2009's 585,000 level.
Housing Starts
(Click on chart to enlarge.)
Recessions shaded
The chart puts these data in perspective. You can see that housing starts have been hanging out at 600,000 (plus or minus) for over a year. That's lower than any of the brief troughs of earlier post-war recessions. Today's numbers are so low that monthly fluctuations can appear large in percentage terms. We have got to break out of this range, say to one million or so, in order to claim any true improvement and an upward trend.
As yesterday's letter said: "(Housing starts) are important because residential real estate was the recession's ground zero. We can't have a robust recovery and expansion until residential real estate returns to health."
(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)
© 2010 Michael B. Lehmann
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